Changes to the Aged Pension Australia

As of the 1st of January 2017 the changes to the age pension will come into effect, these changes will see approximately 50,000 additional Australians receive the full age pension and 300,00 Age pensioners having their part pensions cut and around 100,000 Australians loosing their Age Pension entitlements all together (https://www.amp.com.au/news/2016/october/changes-to-the-age-pension-assets-test and http://www.superguide.com.au/smsfs/300000-retired-australians-to-lose-some-or-all-age-pension-entitlements).

 

To understand the changes the Australian Department of Human Services, have some handy calculators available online to help you better understand the changes: https://www.humanservices.gov.au/customer/enablers/changes-pension-assets-test

The following is a very basic overview:

 

  • The Assets test free area will increase, this means that you can own more assets before it affects your pension
  • The taper rate will change. Currently for every $1000 you own over the Assets test free area your pension is reduced by $1.50 a fortnight. As of the 1st of Jan 2017 this will double to $3.00 a fortnight
  • If your pension is cancelled you will receive the low income health card and if you are over pension age you will receive the commonwealth health card . In this instance you will not have to meet the income test requirements for these cards.

 

These are the new asset test free area limits :

  • $250,000 for a single homeowner
  • $375,000 for a homeowner couple
  • $450,000 for a single non-homeowner
  • $575,000 for a non-homeowner couple

The family home is still exempt from the assets test.

Asset limits for allowances will also increase. There will be no reduction or cancellation of allowances as a result of this change.

You can view what other assets and payments will be affected here:

https://www.humanservices.gov.au/customer/enablers/assets#assetstestlimits

 

According to the Australian Department of Human services the following is what you can expect to happen:

 

Your situation What will happen
You currently get the maximum rate of pension Your payment won’t change.
The changes increase your pension on 1 January 2017 This will happen automatically. You don’t need to contact us.
You get your pension from us and the changes reduce your pension on 1 January 2017 by more than $1 We’ll send you a letter. You don’t need to contact us.
You’re in Australia and the pension you get from us is cancelled on 1 January 2017 We’ll send you a letter. You don’t need to contact us.

Your Pensioner Concession Card will be cancelled but we’ll automatically send you a non-income tested Low Income Health Care Card. If you are over age pension age, we’ll also send you a non-income tested Commonwealth Seniors Health Card. You won’t have to meet the income test requirements for these cards.

You’re overseas and the pension you get from us is cancelled on 1 January 2017 We’ll send you a letter. You don’t need to contact us.

If you had an entitlement to a Pensioner Concession Card it will be cancelled but you’ll be eligible for a non-income tested Low Income Health Care Card. If you’re over age pension age, you’ll also be eligible for a non-income tested Commonwealth Seniors Health Card. You won’t have to meet the income test requirements for these cards.

If you return to Australia before 1 April 2017, we’ll automatically send you the cards. If you return after this, you’ll need to tell us you’re back before we can send the cards.

The changes cancel your Department of Veterans’ Affairs (DVA) pension on 1 January 2017 DVA will automatically send you a non-income tested Commonwealth Seniors Health Card. You can claim a non-income tested Low Income Health Care Card from us if you need one. You won’t have to meet the income test requirements for these cards.

Read more about the Commonwealth Seniors Health Card on the DVA website.

 

 

 

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